In the field of electronic commerce it is common for online merchants to sell products advertised on web sites. Such merchants generally require payment from a buyer in the form of a bank credit card charge. Thus, to complete an online transaction the buyer normally needs to enter information (i.e., a card-holder name, a credit card number, and an expiration date) associated with a bank credit card. This approach requires the online merchant to have the capacity to process credit card payments.
It is now common for relatively unsophisticated sellers to market products online. Many such sellers lack the ability to receive credit card orders. Instead, they depend primarily upon the traditional payment means of personal checks and money orders.
One approach for unsophisticated sellers that is becoming increasingly popular is to advertise and sell their wares on a sophisticated commercial web site that provides a forum for third party sellers. For example, Amazon.com, Inc., the assignee of the present application, hosts two such forums: “Amazon.com Auctions,” in which third party sellers auction off products to buyers, and “zShops,” in which third party sellers advertise fixed-price products to buyers. Such third party transactions generally proceed as follows. A seller posts to the host web site information regarding a product it wishes to sell. A buyer with an interest in the product submits a purchase offer to the host web site. If there is mutual interest in the transaction, the host web site informs each party of the deal. The buyer and seller then arrange on their own how the buyer will pay the purchase price and how the seller will provide the product.
Since the parties must deal with one another in arranging payment and delivery, there immediately arises the problem of trust. Whereas the host web site may be a large well known entity with a reputation to protect, the individual buyers and sellers in these third party transactions are generally unknown to the other party. The buyer will not feel confident about the transaction until he or she receives the product and can inspect it for comparison with expectations. The seller will not feel confident about the transaction until he or she receives the proper payment and, if necessary, converts it into a cash-equivalent form. Typically this means the seller must wait for several days, at least, until a money order, cashier's check, or cleared personal check is in hand.
Furthermore, the seller has no way of knowing whether the buyer is ever going to pay. The buyer may have a change of heart, never to be heard from again. During the week or ten days (or more) that it takes the seller to realize that the buyer has backed out, the seller may miss opportunities to sell the product to other buyers.
Also, payment via a personal check through the mail generally requires a seller to identify his or her name to the buyer. This may be unacceptable to sellers who prefer to remain anonymous to the buying public. Payment to a seller via a credit card requires a buyer to identify his credit card information to the seller. This may be unacceptable to buyers who prefer to limit the exposure of their credit card numbers to trusted commercial entities.
The present invention seeks to overcome these and other problems.